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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

| |     |                                                                      
| | --- | ---------------------------------------------------------------------
| | [X] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the fiscal year ended December 31, 2001

| |       |                                                                          
| | ----- | -------------------------------------------------------------------------
| | [   ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from __________ to __________

Commission file number___________________

METALINE CONTACT MINES

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(Name of Small Business Issuer in its charter)


|                                                                       |  |                                     
|---------------------------------------------------------------------- |  | ------------------------------------
|Washington                                                             |  | 91-0779945                          
|                                                                       |  |                                     
|(State or other jurisdiction of
        incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                                      
|6599 Prichard Creek Road, Murray, Idaho                                |  | 83874                               
|                                                                       |  |                                     
|(Address of principal executive offices)                               |  | (Zip Code)                          

Issuers telephone number 208-682-2217

Securities registered under Section 12(b) of the Exchange Act:

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|                   
|                    |  |                                          
|                   
|                    |  |                                          

Securities registered under Section 12(g) of the Exchange Act:

Capital Common  $0.05 Par Value
(Title of Class)

(Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [   ] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [   ]

State issuers revenues for its most recent fiscal year. $12,000.00





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State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of a specified date within the past 60 days. $302,042 as of April 1, 2002

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [   ] Yes [   ] No. NOT APPLICABLE

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date. 14,064,300 as of April 15,
2002

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The
listed documents should be clearly described for identification purposes (e.g.,
annual report to security holders for the fiscal year ended December 31, 1990).

Transitional Small Business Disclosure Format (check one): Yes [   ] No [X]





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TABLE OF CONTENTS



|          |                                                                                               |  |  |  |  |  |  | 
|--------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I   
|          | Item 1. Description of Business                                                              
|          | Item 2. Description of Property                                                              
|          | Item 3. Legal Proceedings                                                                    
|          | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II  
|          | Item 5. Market for Common Equity and Related Stockholder Matters                             
|          | Item 6. Managements Discussion and Analysis of Financial Condition and Results of Operations
|          | Item 7. Financial Statements                                                                 
|          | Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 
|PART III 
|          | Item 9. Directors, Executive Officers, and Promoters and Control Persons                     
|          | Item 10. Executive Compensation                                                              
|          | Item 11. Security Ownership of Certain Beneficial Owners and Management                      
|          | Item 12. Certain Relationships and Related Transactions                                      
|          | Item 13. Exhibits and Reports on Form 8-K                                                    
|SIGNATURE



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TABLE OF CONTENTS

|         |  |                                                                                                                 |  |  |     |  |  | 
|-------- |  | --------------------------------------------------------------------------------------------------------------- |  |  | --- |  |  | 
|PART I   |  |                                                                                                                 |  |  |     |  |  | 
|Item 1   |  | Description of Business                                                                                         |  |  | 4   | 
|Item 2   |  | Description of Property                                                                                         |  |  | 7   | 
|Item 3   |  | Legal Proceedings                                                                                               |  |  | 8   | 
|Item 4   |  | Submission of Matters to a Vote of Security Holders                                                             |  |  | 8   | 
|        
|PART II  |  |                                                                                                                 |  |  |     |  |  | 
|Item 5   |  | Market for Common Equity and Related Stockholder Matters                                                        |  |  | 8   | 
|Item 6   |  | Management's Discussion and Analysis or Plan of Operation                                                       |  |  | 9   | 
|Item 7   |  | Financial Statements                                                                                            |  |  | F-1 | 
|Item 8   |  | Changes In and Disagreements With Accountants on Accounting And Financial Disclosure                            |  |  | 26  | 
|        
|PART III |  |                                                                                                                 |  |  |     |  |  | 
|Item 9   |  | Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act |  |  | 28  | 
|Item 10  |  | Executive Compensation                                                                                          |  |  | 28  | 
|Item 11  |  | Security Ownership of Certain Beneficial Owners and Management                                                  |  |  | 30  | 
|Item 12  |  | Certain Relationships and Related Transactions                                                                  |  |  | 31  | 
|Item 13  |  | Exhibits and Reports on Form 8-K                                                                                |  |  | 32  | 





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PART I




Item 1. Description of Business

The Company was incorporated on November 15, 1928 pursuant to the laws of
the State of Washington, for the purposes of engaging in the acquisition,
leasing, exploration and, if warranted, development and mining of mineral
resource properties, and to conduct all business appertaining thereto.
Subsequent its organization the Company began acquiring unpatented
zinc-lead mining claims and other mineral rights in the Metaline
District, Pend Oreille County, State of Washington.

Unpatented mining claims are claims in which an individual, corporation,
or other legal entity, by the act of a valid location under the mining
laws of the United States, has obtained a right to remove and extract
minerals from the land, but where full title of the land has not been
acquired from the U.S. Government. A patented mining claim refers to a
parcel of mineral land for which the Federal Government has conveyed its
title to an individual, corporation or other legal entity.

From 1928 until 1946, the Company was inactive, except for maintaining
its mineral holdings, and in 1946, leased its mineral holdings to
Metaline Mining & Leasing Company for a period of 25 years. There is no
affiliation, past or present, between the Company and Metaline Mining &
Leasing Company.

In 1959, The Bunker Hill Company (hereinafter Bunker Hill) began
managing the Companys business affairs and minerals holdings. The
Company, however, remained a non-operating corporation until after the
expiration of its lease with Metaline Mining & Leasing Company.

On November 7, 1960, the Company entered into a Plan and Agreement of
Reorganization and Recapitalization with the Bunker Hill and Day Mines
Inc (hereinafter Day Mines), who at the time were large shareholders of
the Company, and the owners of other mining properties in the Metaline
District, Pend Oreille County, Washington. The parties to the
reorganization agreement felt that by consolidating their respective
mining properties under the common ownership of the Company, the combined
mining properties could be more advantageously explored and, if
warranted, developed. In consideration of said additional mining
properties, and the cancellation of certain indebtedness the Company had
with Bunker Hill and Day Mines, the Company issued 1,288,619 shares of
its common stock to Bunker Hill, and 728,825 shares of its common stock
to Day Mines.

On April 14, 1976, the Company entered into an Exploration and Operating
Agreement (the 1976 Agreement) with Bunker Hill whereby Bunker Hill was
granted the exclusive right to conduct exploration and, if warranted,
development and mining operations on the Companys mineral holdings.

In 1982, control of the Company was transferred from Bunker Hill to
Bunker Limited Partnership, who subsequently transferred the operating
control of the 1976 Agreement to Pintlar Corp., a subsidiary of Gulf
Resources & Chemical, the parent company of Bunker Hill. In 1990,
Pintlar Corp. transferred operating control of the 1976 Agreement to
Resource Finance Inc., the U.S. subsidiary of RFC Resource Finance
Corporation, Toronto, Ontario, Canada. In 1996, Cominco American
Incorporated acquired operating control of the 1976 Agreement with its
acquisition of Resource Finance Inc.

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In October of 1996, the then-current management and majority shareholders
of the Company commenced a structured reorganization whereby the Company
organized Metaline Contact Mines LLC (hereinafter MCMLLC), a Delaware
Limited Liability Company, and assigned all of the surface rights to the
private real property and standing timber thereon (hereinafter the
Assigned Assets) it acquired in the 1960 reorganization agreement with
Bunker Hill and Day Mines, to MCMLLC in exchange for a 99% equity
membership interest in MCMLLC. At that time, management of the Company
felt it would be in the best interests of the shareholders of the Company
to transfer the Assigned Assets to a limited liability company that is
owned by the shareholders of the Company in proportion to their interests
in the Company. The Company became the Managing Member of MCMLLC.
Immediately after its organization, and prior to being assigned the
Assigned Assets, MCMLLC had no business or assets.

A limited liability company is owned by its members, and members own
equity membership interests in the limited liability company similar to
partnership interests in a partnership. In most states, including
Delaware, each member has the authority to manage the business and
affairs of the limited liability company unless such management authority
is vested in one or more managers. Members of a limited liability
company whose business and affairs are managed by a manager or
managers become non-managing members and own non-managing equity
membership interests. As the Managing Member of MCMLLC, the Company has
the full, exclusive and complete discretion to manage and control the
business affairs of MCMLLC, including, but not limited to, the right to
make all decisions affecting the business and affairs of MCMLLC as it
deems necessary or appropriate to accomplish the purposes and direct the
affairs of MCMLLC. The non-managing members of MCMLLC have no rights to
vote on or consent to any matter, act, decision or document involving
MCMLLC or its business, or take part in the day-to-day management, or the
operation or control, of the business and affairs of MCMLLC.

As a part of its reorganization, the Company retained ownership of all
sub-surface mineral rights to the Assigned Assets, ownership of its
unpatented mining claims and attached mineral rights, and offered its
shareholders the opportunity to exchange their shares of common stock in
the Company for proportionate non-managing equity membership interests in
MCMLLC. A total of 19 of the Companys 302 shareholders accepted the
exchange offer that resulted in MCMLLC owning 11,686,643 shares of common
stock in the Company, or 93.02% of the outstanding shares of the Company
at the time of the reorganization.

On September 1, 1997, the then-current management of the Company
negotiated a new Mining Lease With Purchase Option with Cominco American
Incorporated (hereinafter the New Cominco Lease) on the Companys
mineral rights, which New Cominco Lease superseded the 1976 Agreement in
its entirety.

On June 1, 1998, Nor-Pac Limited Company (hereinafter Nor-Pac), an
Idaho Limited Liability Company, acquired a 99.994% non-managing equity
membership interest in MCMLLC from 18 of its non-managing members, and
became the controlling shareholder of the Company through its majority
ownership of MCMLLC. Simultaneous therewith, the Companys Board of
Directors resigned, Nor-Pac filled the vacant Board with its slate of
Directors, and MCMLLC sold the Assigned Assets to an independent third
party.

The Company does not own any interest in mineral properties or rights
that are currently in production, nor has it ever derived any revenues
from the sale of zinc or other materials. It has never filed any
bankruptcy, receivership or similar proceedings.

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Business of Company

The Company leases its mineral rights and properties described in Item 3
below, to Cominco American Incorporated (hereinafter Cominco) pursuant
to the New Cominco Lease. Cominco is the U.S. subsidiary of Cominco Ltd.,
a large international Canadian mining company. Cominco is exploring for
zinc and lead ores on the Companys mineral rights. In the event that
Cominco is successful in discovering a commercially viable ore body on
the Companys mineral holdings, and that ore body is placed into
commercial production, the Company will receive production royalties from
Cominco. There are no assurances, however, that Cominco will be
successful in discovering a commercially viable ore body on the Companys
mineral holdings.

The term of the New Cominco Lease is for 20 years, with an option for an
additional 20-year period, and so long thereafter as there is commercial
production from the Companys mineral rights. Under the terms of the
New Cominco Lease, the Company receives an advance royalty of $3,000.00
per quarter for the first 5 years, $4,000.00 per quarter for the next 5
years, and $5,500.00 per quarter thereafter. The New Cominco Lease also
provides a 3% Net Smelter Returns production royalty upon the
commencement of commercial production. During the first 3 years of
production the production royalty is fixed at $150,000.00 per year.

Under the terms of the New Cominco Lease, the Company is not responsible
for or subject to any existing or probable governmental approvals or
regulations with regard to its mineral rights. In the event, however,
Cominco is successful in placing the Companys mineral rights into
commercial production, federal, state and local governmental permits may
be required; in which case obtaining any such permits is the
responsibility of Cominco. Any ores mined from the Companys mineral
rights by Cominco would be by underground mining methods, and transported
underground to Comincos processing facilities that are situated on
Comincos own properties. Tailings ponds and associated waste rock
storage areas will be on Cominco owned properties, and, except for
surface exploration drilling, and geophysical and geochemical surveys,
there will be no surface disturbances on the Companys holdings that
would be subject to reclamation requirements. Surface disturbances from
surface drilling, and geophysical and geochemical surveys, would be
extremely minor, and in the event Cominco failed to reclaim such sites,
the Company may be required to reclaim same, in which case the resultant
liability to the Company would not be significant. All permitting, and
reclamation requirements and liabilities with regard to Comincos
processing facilities are for the sole account and responsibility of
Cominco. Failure by Cominco to obtain any necessary permits for its
processing facilities could result in Cominco ceasing its exploration
activities on the Companys mineral holdings, and subject the New Cominco
Lease to termination by Cominco on its terms.

In 1995, McCulley Frick & Gilman Inc. (MF&G), an environmental
consulting and engineering services firm with offices in Wallace, Idaho,
conducted a Phase I Environmental Site Assessment (the ESA) of the
Companys private landholdings. In December of 1997, the Company
obtained an update to the ESA also authored by MF&G. Both assessments
affirmed that previous mining exploration activities conducted on the
properties left no hazardous substances or facilities, as defined in
the Comprehensive Environmental, Response, Compensation, and Liability
Act (CERCLA), and pose no threat to human health, natural resources, or
the environment from the standpoint of releases of any potentially
hazardous substances to soil, groundwater, surface water or air. It is
therefore managements opinion that the Company would have minimal
liability if named as a Potentially Responsible Party (PRP) under
CERCLA from any past mining-oriented activities. Further, as stated in
the above paragraph, any future mining operations that may be conducted
on the Companys mineral rights by Cominco under the New Cominco Lease
would be by underground mining methods and the ores extracted would be
transported underground in raw

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form directly to Comincos processing facilities located on Cominco owned
property. No hazardous substances or facilities will be used or
constructed on the Companys mineral holdings. Nevertheless, the Company
is listed in the chain-of-title of the properties and could be named as a
PRP in the future. However, it is managements opinion that any such
liability from being named a PRP would be minimal, and defendable under
42 U.S.C. § 9607(b)(3).

Additionally, under the New Cominco Lease, Cominco has the responsibility
to maintain the Companys unpatented mining claims. To maintain an
unpatented mining claim, the claimant must pay a $100 maintenance fee and
incur $100 in assessment expenditures annually per claim. In the event
Cominco failed to maintain the Companys unpatented mining claims, the
Company would be required to pay the annual maintenance fee and incur
assessment expenditures in order to maintain the claims in good standing.
Due to its large number of unpatented mining claims, any such failure by
Cominco could be a significant financial obligation of the Company.

The Company has no employees, has not announced any new products or
services; does not require sources and raw materials; and has spent no
funds on research during the last two fiscal years.

Reports to securities holders

On September 14, 2000, the Company became a reporting company with the
Securities and Exchange Commission, and as a reporting company will file all
required reports, including, but not limited to, its Form 10-QSB and Form
10-KSB. The Company will supply annual reports to its shareholders.

The public may read and copy all materials the Company files with the U.S.
Securities and Exchange Commission (the SEC) at the SECs Public Reference
Room at 450 Fifth Street N.W., Washington, D.C. 20549. The public may also
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov)
that will contain reports, proxy and information statements and other
information regarding the Company that will be filed electronically with the
SEC.




Item 2. Description of Property

The Company owns all right, title and interest in and to mineral rights,
all of which are located in the County of Pend Oreille, State of
Washington, as follows: the mineral rights attached to 5,798 acres of
fee simple property; the mineral rights attached to 487 acres of patented
mining claims, and the mineral rights attached to 1,925 acres of
unpatented lode mining claims. The Company does not own the surface
rights to any of the fee simple property or patented mining claims. It
does, however, have the right to use of the surface of the fee simple
property and patented mining claims for exploration purposes, and the
surface of the unpatented mining claims for exploration and, if
warranted, development and mining purposes.

A map of the Companys mineral rights in relationship to Comincos Pend
Oreille Mine properties is shown on the following page.

The Company rents office facilities at 6599 Prichard Creek Road, Murray,
Idaho 83874, pursuant to an Office Service Agreement, dated June 1, 1998,
as amended on July 1, 1999 and September 1, 2000, between Murrayville
Land Company LLC and the Company. The term of the agreement is
month-to-month, for $225.00 per month, plus its share of the operating
costs of the facility, and other expenses

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The Company does not invest in real estate or interests in real estate,
does not invest in real estate mortgages or the types of properties
subject to mortgages, does not invest in the securities of or interests
of persons primarily engaged in real estate, does not own any improved
properties, and has no plans for the renovation, improvement or
development of any of its properties. In the opinion of management, the
Companys properties are adequately covered by insurance.




Item 3. Legal Proceedings

Neither the Company, its directors, officers or affiliates, or owners of
record or beneficially of more than 5% of any class of voting securities,
is a party to any pending legal proceedings, nor do any of the above
named parties expect to be a party to any future legal proceedings.
Additionally, the Company is not aware of any governmental authority that
is contemplating legal proceedings against the Company, its mineral
rights or properties.




Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted during the past fiscal year covered by this
report to a vote of security holders, through the solicitation of proxies
or otherwise.
The Company did, however, file a Preliminary Proxy on Form 14A with the
U.S. Securities and Exchange Commission (the SEC) on May 21, 2001. On
May 25, 2001, the SEC provided the Company with written comments
concerning the Preliminary Proxy requiring additional disclosure. At the
time it filed the Preliminary Proxy with the SEC, the Company was seeking
shareholder approval to assign all of its assets and liabilities to
Paymaster Resources Incorporated, a non-reporting Idaho corporation, in
exchange for 14,064,300 shares of Paymasters authorized, but unissued,
common stock. The Company and Paymaster Resources Incorporated
subsequently agreed to rescind the transaction. The Company did not file
an amendment to the Preliminary Proxy with the SEC, and will not pursue
the transaction.




PART II




Item 5. Market for Common Equity and Related Stockholder Matters

The Companys shares as of the date of this filing are listed for trading
on NASDAQs OTCBB and the National Quotation Bureaus Pink Sheets,
since June 4, 1999. The range of high and low bid information for the
last eight quarters is as follows:

|                  |  |      |       |     |  |   |        | 
|----------------- |  | ---- | ----- | --- |  | - | ------ | 
|                  |  | High |       | Low
|                  |  |      |       |    
|1st Quarter, 2000 |  | $    | 0.25  |     |  | $ | 0.0625 | 
|2nd Quarter, 2000 |  | $    | 0.25  |     |  | $ | 0.0625 | 
|3rd Quarter, 2000 |  | $    | 0.25  |     |  | $ | 0.0625 | 
|4th Quarter, 2000 |  | $    | 0.375 |     |  | $ | 0.08   | 
|                 
|1st Quarter, 2001 |  | $    | 0.375 |     |  | $ | 0.08   | 
|2nd Quarter, 2001 |  | $    | 0.375 |     |  | $ | 0.08   | 
|3rd Quarter, 2001 |  | $    | 0.45  |     |  | $ | 0.15   | 
|4th Quarter, 2001 |  | $    | 0.45  |     |  | $ | 0.15   | 

The above quotations were supplied by Olson Payne & Company, Spokane,
Washington. Olson Payne & Company is licensed securities brokerage firm
registered with the National Association of Securities Dealers. There is
no affiliation between the Company and this firm. The quoted prices are
inter-dealer prices, without retail mark-up, markdown or commissions, and
may not represent actual transactions.

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Management approved the reservation of 2,000,000 shares of the Companys
common stock for options pursuant to the 1999 Stock Option Plan (the
Stock Option Plan). On November 15, 1999, the Company held a Special
Meeting of Shareholders, who approved the Stock Option Plan. On November
16, 1999, the Company issued options to its three (3) directors and two
(2) independent consultants, totaling One Million (1,250,000) shares.
The independent consultants are Gene George of Spokane, Washington, and
Nelson Robert Howard of Lewiston, Idaho.

There are 314,500 shares of common stock that are eligible to be sold
pursuant to Rule 144 of the Securities Act of 1933, as amended. The
Company has not agreed to register any of its securities under the
Securities Act for sale by its security holders, nor is any of its common
equity being, or has been, proposed to be offered publicly. The Company
has issued no dividends to date, and there are no immediate plans to
issue dividends this year or in the immediate future.

There are 303 shareholders of the Companys common stock.




Item 6. Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The Company had revenues from operations of $12,000 in 2000, the same as
its operating revenues of $12,000 in 1999. However, the Company
experienced an increased operating loss of $150,901 in 2001 versus
$143,192 in 2000. The increased loss, $7,709 in 2000, was predominantly
due to increased consulting, professional and associated costs related to
the Company preparing and filing its reporting requirements with the
Securities and Exchange Commission (SEC).

Consulting and management fees increased by $4,200 in 2001 to $124,275
versus $120,075 in 2000, due to the increase of consulting fees for an
outside financial consultant. Professional fees, consisting of legal and
accounting, increased $4 547 in 2001 to $23,688 in 2001 versus $19,141 in
2000, due to audited and audit reviewed financial statements necessitated
in SEC filing requirements, and tax advice received in connection with a
proposed transaction with Paymaster Resources Incorporated, which
transaction was later rescinded. Transfer agent fees increased $239 in
2001 to $1,148 from $909 in 2000 due to a decrease in trading volume on
the Companys common stock. Office supplies and expenses decreased to
$13,051 in 2001 from $13,294 in 2000 due reduced costs associated with
the Companys Office Services Agreement. Travel expenses decreased by
$961 in 2001, to a total of $739 in 2001 from $1,700 in 2000, due to
decreased travel requirements by the Company.

The Companys other income decreased by $5,410 in 2001 to $15,575 from
$20,985 in 2000. The decrease was caused by decrease in dividend income
earned on the Companys money market account, and an increase in the
amount of loss from its investment in Metaline Contact Mines LLC of
$1,659, in 2001 from $405 in 2000.

Financial Condition

The Companys financial condition for the years 2000 and 2001 is such
that it can continue at its current level of operations for an additional
2 years without the necessity of additional capital. Current level of
operations includes maintaining compliance with the New Cominco Lease,
and the reporting requirements of the SEC. Thereafter, the Company may
require additional capital for future operating costs and working
capital. Such additional capital could be obtained from either increased
revenues from operations (in the event the Companys mineral rights and
properties are placed into commercial production by Cominco), or from the
sale of shares of the Companys authorized, but unissued, common stock.

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Under the New Cominco Lease, any production decision on the Companys
mineral rights and properties is under the sole discretion and control of
Cominco. Further, there are no assurances that the Company would be able
to sell shares of its authorized, but unissued, common stock on terms
acceptable to the Company. And, any such sales of shares could be
dilutive to the Companys then-existing shareholders, and any debt
financings could involve restrictive covenants with respect to future
capital raising activities, and other financial and operational matters.

At present there are no trends, events or uncertainties that have or are
reasonably likely to have a material impact on the Companys short-term
or long-term liquidity; there are no material commitments for capital
expenditures, except for the management of its own business affairs; and
there are no known trends, events or uncertainties that have or that are
reasonably expected to have a material impact on the revenues from
operations.

As a mineral resource exploration oriented enterprise, the Company will
investigate future business opportunities that are consistent with its
corporate charter and field of expertise, and in the opinion of
management worthy of investigation. However, the Company competes with
other mining companies in the acquisition of mineral properties, some of
which have substantially greater financial resources than the Company.
Management has not recognized any such opportunities as of the date of
this filing, and does not expect to during the next 12-month period. In
the event such an opportunity would materialize, the Companys initial
due diligence process in investigating such opportunity would not involve
any significant investment by the Company.
Liquidity and Capital Resources

To date, the Company has funded its capital requirements from revenues
from operations, and dividends and interest earned on its cash accounts.
The Companys cash position as of December 31, 2001 was $183,354 as
compared to $321,761 as of December 31, 2000.

The Company has no debt. The Company does not expect to incur any
debt in the immediate future to expand its current level of operation,
nor does it expect to expand its business operation in the immediate
future. The Companys most significant cash requirement is its
management fee of $10,000 per month payable under the terms of its
Management Agreement with Nor-Pac. However, as a related party, Nor-Pac
has contractually agreed in the Management Agreement to (i) review and
adjust on a quarterly basis the amount of the management fees based on
time spent on the Companys affairs, and (ii) convert management fees
that are payable in cash into common stock in the Company in the event of
a shortfall of cash (the exchange rate would be determined at the time of
the shortfall). On January 1, 2002, the Company and Nor-Pac amended the
terms of the Management Agreement so that the Company has reduced the
amount of its monthly management fee from $10,000 to $3,000. The Company
also has a related party receivable from MCMLLC in the amount of $109,413
as of December 31, 2001, plus accrued interest of $7,660. As the
Managing Member of MCMLLC, the Company has the ability to collect on this
receivable in the event of a shortfall of cash.

Based on the foregoing, it is managements opinion that at its current
level of operations the Company can satisfy its working capital
requirements internally in the immediate future without the need to seek
outside sources of equity or debt funding.

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Item 7. Financial Statements

METALINE CONTACT MINES

TABLE OF CONTENTS

|                              |                                   |  |     |     | 
|----------------------------- | --------------------------------- |  | --- | --- | 
|INDEPENDENT AUDITORS REPORT  |                                   |  | F-2 |    
|FINANCIAL STATEMENTS          |                                   |  |     |    
|                              | Balance Sheets                    |  |     | F-3 | 
|                              | Statements of Operations          |  |     | F-4 | 
|                              | Statement of Stockholders Equity |  |     | F-5 | 
|                              | Statements of Cash Flows          |  |     | F-6 | 
|NOTES TO FINANCIAL STATEMENTS |                                   |  | F-7 |    

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The Board of Directors
Metaline Contact Mines
Murray, Idaho

INDEPENDENT AUDITORS REPORT

We have audited the accompanying balance sheets of Metaline Contact Mines as of
December 31, 2001 and 2000, and the related statements of operations,
stockholders equity and cash flows for the years then ended. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Metaline Contact Mines as of
December 31, 2001 and 2000, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

Williams & Webster, P.S.
Spokane, WashingtonCertified Public Accountants

February 14, 2002

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METALINE CONTACT MINES
BALANCE SHEETS

|                                     |                                            |                                                                                                       |                            |         |              |         |              |         |          |         | 
|------------------------------------ | ------------------------------------------ | ----------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------------ | ------- | ------------ | ------- | -------- | ------- | 
|                                     |                                            |                                                                                                       |                            |         | December 31, |         | December 31,
|                                     |                                            |                                                                                                       |                            |         | 2001         |         | 2000        
|                                     |                                            |                                                                                                       |                            |         |              |         |             
|ASSETS                               |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | CURRENT ASSETS                             |                                                                                                       |                            |         |              |         |              |         |         
|                                     |                                            | Cash and cash equivalents                                                                             |                            | $       | 183,354      |         |              | $       | 321,761  |        
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     |                                            |                                                                                                       | Total Current Assets       |         |              | 183,354 |              |         |          | 321,761 | 
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | OTHER ASSETS                               |                                                                                                       |                            |         |              |         |              |         |         
|                                     |                                            | Receivables from related parties                                                                      |                            |         | 109,413      |         |              |         | 109,413  |        
|                                     |                                            | Accrued interest receivable                                                                           |                            |         | 7,660        |         |              |         |         |        
|                                     |                                            | Investment in LLC                                                                                     |                            |         | 36,188       |         |              |         | 37,847   |        
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     |                                            |                                                                                                       | Total Other Assets         |         |              | 153,261 |              |         |          | 147,260 | 
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | TOTAL ASSETS                               |                                                                                                       | $                          | 336,615 |              |         | $            | 469,021 |         
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | CURRENT LIABILITIES                        |                                                                                                       |                            |         |              |         |              |         |         
|                                     |                                            | Accounts payable                                                                                      |                            | $       |             |         |              | $       | 1,355    |        
|                                     |                                            | Unrealized royalty income                                                                             |                            |         | 3,000        |         |              |         | 3,000    |        
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     |                                            |                                                                                                       | Total Current Liabilities  |         |              | 3,000   |              |         |          | 4,355   | 
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | COMMITMENTS AND CONTINGENCIES              |                                                                                                       |                            |        |              |         |              |        |         
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | STOCKHOLDERS EQUITY                       |                                                                                                       |                            |         |              |         |              |         |         
|                                     |                                            | Common stock, $0.05 par value;
20,000,000 shares authorized,
14,064,300 shares issued and outstanding |                            |         | 703,222      |         |              |         | 703,222  |        
|                                     |                                            | Additional paid-in capital                                                                            |                            |         | 302,165      |         |              |         | 302,165  |        
|                                     |                                            | Stock options                                                                                         |                            |         | 17,907       |         |              |         | 13,632   |        
|                                     |                                            | Accumulated deficit                                                                                   |                            |         | (689,679     | )       |              |         | (554,353 | )      
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     |                                            |                                                                                                       | Total Stockholders Equity |         |              | 333,615 |              |         |          | 464,666 | 
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        
|                                     | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                       | $                          | 336,615 |              |         | $            | 469,021 |         
|                                     |                                            |                                                                                                       |                            |         |              |         |              |        

The accompanying notes are an integral part of these financial statements.

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METALINE CONTACT MINES
STATEMENTS OF OPERATIONS

|                                                                        |                                |                                           |            |         |              |   |              |         |         |  | 
|----------------------------------------------------------------------- | ------------------------------ | ----------------------------------------- | ---------- | ------- | ------------ | - | ------------ | ------- | ------- |  | 
|                                                                        |                                |                                           |            |         | Year Ended  
|                                                                        |                                |                                           |            |         |             
|                                                                        |                                |                                           |            |         | December 31, |   | December 31,
|                                                                        |                                |                                           |            |         | 2001         |   | 2000        
|                                                                        |                                |                                           |            |         |              |   |             
|REVENUES                                                                |                                |                                           |            |         |              |   |              |        
|                                                                        | Royalty income                 |                                           | $          | 12,000  |              |   | $            | 12,000  |        
|                                                                        |                                |                                           |            |         |              |   |              |        
|GENERAL AND ADMINISTRATIVE EXPENSES                                     |                                |                                           |            |         |              |   |              |        
|                                                                        | Consulting and management fees |                                           |            | 124,275 |              |   |              | 120,075 |        
|                                                                        | Professional fees              |                                           |            | 23,688  |              |   |              | 19,141  |        
|                                                                        | Transfer agent fees            |                                           |            | 1,148   |              |   |              | 909     |        
|                                                                        | Office supplies and expenses   |                                           |            | 13,051  |              |   |              | 13,367  |        
|                                                                        | Travel and meals               |                                           |            | 739     |              |   |              | 1,700   |        
|                                                                        |                                |                                           |            |         |              |   |              |        
|                                                                        |                                | Total General and Administrative Expenses |            |         | 162,901      |   |              |         | 155,192 | 
|                                                                        |                                |                                           |            |         |              |   |              |        
|OPERATING LOSS                                                          |                                |                                           | (150,901   | )       |              |   | (143,192     | )      
|                                                                        |                                |                                           |            |         |              |   |              |        
|OTHER INCOME                                                            |                                |                                           |            |         |              |   |              |        
|                                                                        | Interest income                |                                           |            | 7,660   |              |   |              | 3,563   |        
|                                                                        | Dividend income                |                                           |            | 9,274   |              |   |              | 17,827  |        
|                                                                        | Other income                   |                                           |            | 300     |              |   |              |        |        
|                                                                        | Loss from investment in LLC    |                                           |            | (1,659  | )            |   |              | (405    | )      
|                                                                        |                                |                                           |            |         |              |   |              |        
|                                                                        |                                | Total Other Income                        |            |         | 15,575       |   |              |         | 20,985  | 
|                                                                        |                                |                                           |            |         |              |   |              |        
|LOSS BEFORE TAXES                                                       |                                |                                           | (135,326   | )       |              |   | (122,207     | )      
|INCOME TAX EXPENSE                                                      |                                |                                           |           |         |              |   |             |        
|                                                                        |                                |                                           |            |         |              |   |              |        
|NET LOSS                                                                |                                | $                                         | (135,326   | )       |              | $ | (122,207     | )      
|                                                                        |                                |                                           |            |         |              |   |              |        
|NET LOSS PER COMMON SHARE,
BASIC AND DILUTED                            |                                | $                                         | (0.01      | )       |              | $ | (0.01        | )      
|                                                                        |                                |                                           |            |         |              |   |              |        
|WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING,
BASIC AND DILUTED |                                |                                           | 14,043,466 |         |              |   | 14,043,466   |        
|                                                                        |                                |                                           |            |         |              |   |              |        

The accompanying notes are an integral part of these financial statements.

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METALINE CONTACT MINES
STATEMENT OF STOCKHOLDERS EQUITY

|                           |                                                           |  |              |         |        |   |         |        |             |   |         |   |               |   |          |          |   |   |        |       |       |   |         |          |  
|-------------------------- | --------------------------------------------------------- |  | ------------ | ------- | ------ | - | ------- | ------ | ----------- | - | ------- | - | ------------- | - | -------- | -------- | - | - | ------ | ----- | ----- | - | ------- | -------- | -
|                           |                                                           |  | Number of    |         |        |   |         |        |             |   |         |   |               |   |          |          |   |   |        |       | Total
|                           |                                                           |  | Common       |         | Common |   | Paid-in |        | Accumulated |   | Stock   |   | Stockholders'
|                           |                                                           |  | Stock Shares |         | Stock  |   | Capital |        | Deficit     |   | Options |   | Equity       
|                           |                                                           |  |              |         |        |   |         |        |             |   |         |   |              
|Balance, December 31, 1999 |                                                           |  | 13,564,300   |         |        | $ | 678,222 |        |             | $ | 302,165 |   |               | $ | (432,146 | )        |   | $ | 13,632 |       |       | $ | 561,873 |         
|                           | Issuances of stock for consulting fees at
$0.05 per share |  |              | 500,000 |        |   |         | 25,000 |             |   |         |  |               |   |          |         |   |   |        |      |       |   |         | 25,000   |  
|                           | Net loss for the year ended December 31, 2000             |  |              |        |        |   |         |       |             |   |         |  |               |   |          | (122,207 | ) |   |        |      |       |   |         | (122,207 | )
|                           |                                                           |  |              |         |        |   |         |        |             |   |         |   |               |   |          |          |   |   |        |       |       |   |         |         
|Balance, December 31, 2000 |                                                           |  | 14,064,300   |         |        | $ | 703,222 |        |             | $ | 302,165 |   |               | $ | (554,353 | )        |   | $ | 13,632 |       |       | $ | 464,666 |         
|                           | Stock options granted November 12, 2001                   |  |              |        |        |   |         |       |             |   |         |  |               |   |          |         |   |   |        | 4,275 |       |   |         | 4,275    |  
|                           | Net loss for the year ended
December 31, 2001             |  |              |        |        |   |         |       |             |   |         |  |               |   |          | (135,326 | ) |   |        |      |       |   |         | (135,326 | )
|                           |                                                           |  |              |         |        |   |         |        |             |   |         |   |               |   |          |          |   |   |        |       |       |   |         |         
|Balance, December 31, 2001 |                                                           |  | 14,064,300   |         |        | $ | 703,222 |        |             | $ | 302,165 |   |               | $ | (689,679 | )        |   | $ | 17,907 |       |       | $ | 333,615 |         
|                           |                                                           |  |              |         |        |   |         |        |             |   |         |   |               |   |          |          |   |   |        |       |       |   |         |         

The accompanying notes are an integral part of these financial statements.

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METALINE CONTACT MINES
STATEMENTS OF CASH FLOWS

|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |          |         |     | 
|-------------------------------------------- | -------------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------ | -------- | ------------------ | -------- | ------------ | -------- | ------- | --- | 
|                                             |                                                                                        |                                           |                                                  |          | For the Year Ended
|                                             |                                                                                        |                                           |                                                  |          |                   
|                                             |                                                                                        |                                           |                                                  |          | December 31,       |          | December 31,
|                                             |                                                                                        |                                           |                                                  |          | 2001               |          | 2000        
|                                             |                                                                                        |                                           |                                                  |          |                    |          |             
|CASH FLOWS FROM OPERATING ACTIVITIES         |                                                                                        |                                           |                                                  |          |                    |          |              |         
|                                             | Net loss                                                                               |                                           | $                                                | (135,326 | )                  |          | $            | (122,207 | )      
|                                             | Adjustments to reconcile net loss to net cash
provided (used) by operating activities: |                                           |                                                  |          |                    |          |              |          |        
|                                             | Payment of expenses from issuance of stock                                             |                                           |                                                  | 4,275    |                    |          |              | 25,000   |        
|                                             | Non-cash interest receivable accrual                                                   |                                           |                                                  | (7,660   | )                  |          |              |         |        
|                                             | Loss on investment in LLC                                                              |                                           |                                                  | 1,659    |                    |          |              | 406      |        
|                                             | Changes in assets and liabilities:                                                     |                                           |                                                  |          |                    |          |              |          |        
|                                             |                                                                                        | Decrease (increase) in account receivable |                                                  |          |                   |          |              |          | 117,355 |    
|                                             |                                                                                        | Increase (decrease) in accounts payable   |                                                  |          | (1,355             | )        |              |          | (24,521 | )  
|                                             |                                                                                        | Decrease (increase) in other assets       |                                                  |          |                   |          |              |          | 1,500   |    
|                                             |                                                                                        | Increase in unrealized royalty income     |                                                  |          |                   |          |              |          | 3,000   |    
|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |         
|                                             |                                                                                        |                                           | Net cash provided (used) by operating activities |          |                    | (138,407 | )            |          |         | 533 | 
|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |         
|CASH FLOWS PROVIDED BY INVESTING ACTIVITIES  |                                                                                        |                                           |                                                 |          |                    |          |             |         
|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |         
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES  |                                                                                        |                                           |                                                 |          |                    |          |             |         
|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |         
|                                             | Net increase (decrease) in cash and cash equivalents                                   |                                           |                                                  | (138,407 | )                  |          |              | 533      |        
|Cash and cash equivalents, beginning of year |                                                                                        |                                           | 321,761                                          |          |                    |          | 321,228      |         
|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |         
|Cash and cash equivalents, end of year       |                                                                                        | $                                         | 183,354                                          |          |                    | $        | 321,761      |         
|                                             |                                                                                        |                                           |                                                  |          |                    |          |              |         
|SUPPLEMENTAL CASH FLOW DISCLOSURES:          |                                                                                        |                                           |                                                  |          |                    |          |              |         
|                                             | Income taxes paid                                                                      |                                           | $                                                |         |                    |          | $            |         |        
|                                             | Interest paid                                                                          |                                           | $                                                |         |                    |          | $            |         |        
|NON-CASH TRANSACTIONS:                       |                                                                                        |                                           |                                                  |          |                    |          |              |         
|                                             | Stock issued in payment of consulting and other expenses                               |                                           | $                                                |         |                    |          | $            | 25,000   |        
|                                             | Payment of expenses from stock options granted                                         |                                           | $                                                | 4,275    |                    |          | $            |         |        

The accompanying notes are an integral part of these financial statements.

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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS

Metaline Contact Mines (hereinafter Metaline) was incorporated in November of
1928 under the laws of the State of Washington for the purpose of engaging in
mining and the buying and selling of ores, metals, and minerals.

The Company was reorganized and recapitalized in 1960 and its articles of
incorporation were amended to expand its business purposes to include various
additional business activities. Metaline has continued its operations since
its formation and has historically acquired land, mineral rights, patented lode
mining claims, and timber.

In the last quarter of 1996, Metaline transferred substantially all of its
assets to a limited liability company. See Note 3 and Note 10.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to
assist in understanding the financial statements. The financial statements and
notes are representations of the Companys management which is responsible for
their integrity and objectivity. These accounting policies conform to
accounting principles generally accepted in the U.S. and have been consistently
applied in the preparation of the financial statements.

Accounting Method

The Companys financial statements are prepared using the accrual method of
accounting.

Use of Estimates

The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.

Fair Value of Financial Instruments

The carrying amounts for cash and receivables approximate their fair value.

Concentration of Risk

The Company held funds in primarily one money market account, the funds of
which are not insured by the Federal Deposit Insurance Company. The balance in
that account was $180,035 and $321,761 for the years ended December 31, 2001
and 2000, respectively.

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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments
and Hedging Activities, as amended by SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities  Deferral of the Effective Date of FASB No.
133, and SFAS No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities, which is effective for the Company upon
incorporation. These statements establish accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. They require that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i) the changes
in the fair value of the hedged asset or liability that are attributable to the
hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
For a derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.

Historically, the Company has not entered into derivatives contracts to hedge
existing risks or for speculative purposes.

At December 31, 2001, the Company had not engaged in any transactions that
would be considered derivative instruments or hedging activities.

Investments

The Company accounts for its investment in Metaline Contact Mines LLC using the
equity method. See Note 3.

Compensated Absences

Currently, the Company has no employees; therefore, it is impracticable to
estimate the amount of compensation for future absences and no liability has
been recorded in the accompanying financial statements. The Companys policy
will be to recognize the costs of compensated absences when actually paid to
employees.

Basic and Diluted Net Loss Per Share

Net loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted average
number of shares was calculated by taking the number of shares outstanding and
weighting them by the amount of time that they were outstanding. Basic and
diluted net loss per share were the same, as there were no common stock
equivalents outstanding.

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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting for Stock Options and Warrants Granted to Employees and Nonemployees

Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation (SFAS No. 123),defines a fair value-based method
of accounting for stock options and other equity instruments. The Company has
adopted this method, which measures compensation costs based on the estimated
fair value of the award and recognizes that cost over the service period.

Revenue Recognition

Revenues and cost of revenues will be recognized when services or products are
furnished or delivered. At December 31, 2001, no revenues were realized or
recognized by the Company.

Accounting Pronouncements

In September 2000, the FASB issued SFAS No. 140 Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities. This
statement provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishment of liabilities and also
provides consistent standards for distinguishing transfers of financial assets
that are sales from transfers that are secured borrowings. SFAS No. 140 is
effective for recognition and reclassification of collateral and for
disclosures relating to securitization transactions and collateral for fiscal
years ending after December 15, 2000, and is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring
after June 30, 2001. The Company believes that the adoption of this standard
will not have a material effect on the Companys results of operations or
financial position.

In June 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 provides for the
elimination of the pooling-of-interests method of accounting for business
combinations with an acquisition date of July 1, 2001 or later. SFAS No. 142
prohibits the amortization of goodwill and other intangible assets with
indefinite lives and requires periodic reassessment of the underlying value of
such assets for impairment. SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001. An early adoption provision exists for
companies with fiscal years beginning after March 15, 2001. On September 1,
2001, the Company adopted SFAS No. 142. Application of the nonamortization
provision of SFAS No. 142 is expected to result in no increase in net income in
fiscal 2002. The Company is currently evaluating the impact of the transitional
provisions of the statement.

In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS No. 144). SFAS 144 replaces SFAS 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed of. This new standard establishes a single accounting model
for long-lived assets to be disposed of by sale, including discontinued
operations. Statement 144 requires that these long-lived assets be measured at
the lower of carrying amount or fair value less cost to sell, whether reported
in continuing operations or discontinued operations. This statement is
effective beginning for fiscal years after December
F-10
F-9Table of Contents

METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

15, 2001, with earlier application encouraged. The Company adopted SFAS 144
and does not
believe that the adoption will have a material impact on the financial
statements of the Company at December 31, 2001.

NOTE 3  INVESTMENTS IN LLC

On October 30, 1996, Metaline formed a Delaware limited liability company,
Metaline Contact Mines, LLC (hereinafter The LLC). Upon organization of The
LLC, The Company transferred substantially all of its assets (primarily real
property surface rights and timber) to The LLC. The Company recorded its
initial investment in The LLC at $674,834, the net book value of the assets
transferred. At the time of The LLCs formation, the Company was the sole
member in The LLC, representing 100% ownership.

In 1998, the majority of the Companys interest in The LLC was expensed in
connection with the sale of the majority of The LLCs assets. See Note 5.

At the beginning of 1998, the Companys former shareholders acquired 93 percent
of The LLC by transferring their stock in the Company to The LLC in exchange
for non-managing member interests. At the conclusion of this share exchange,
the Companys percentage of ownership in The LLC was reduced to seven percent
(7%). The Company wrote down its initial investment by 93%, thus a loss of
$627,596 was recorded to reflect its diluted investment in The LLC. After the
write down of its investment, application of The LLCs capital gains, and The
LLCs operating loss for the year ended December 31, 1998, the value of the
Companys investment in The LLC was $45,440.

Both before and after the share exchange, the Company was the managing member
of The LLC. See Note 5 and Note 9.

At December 31, 2001, the Company recorded a loss in The LLC of $1,659,
resulting in a decreased value of the Companys interest to $36,188.

NOTE 4  MINERAL PROPERTIES

In 1996, Metaline transferred timber and real property surface rights to The
LLC (see Note 3) but retained underground mineral rights to the transferred
real property and its mining claims, located in Pend Oreille County in
Washington State. The timber and real property surface rights were deemed by
management to have a value equal to their recorded cost and this cost was
transferred to The LLC. The related mineral rights are carried at no cost on
Metalines books.

In 1997, Metaline and The LLC jointly leased certain Pend Oreille County real
estate and all of its mineral rights to a major mining company. See Note 6.

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##### Table of Contents



METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 5  RELATED PARTIES

During 1996, $33,055 was advanced to The LLC for operating expenditures. At
December 31, 2001 and 2000, the remaining balance was approximately $4,000.
These funds are recorded on Metalines books as part of a non-current, related
party receivable, which is uncollateralized.

During 1998, The LLC sold property for a net gain of $5,958,762. Metalines
share of this gain before adjustment of the Companys investment from The LLCs
operating results and write down from its substantial decrease in ownership of
The LLC (See Note 3) was $507,858. The Company recorded a non-current, related
party receivable of $109,413 for the balance of the distribution. Due to
uncertainty as to the date this receivable will be collected, interest at the
rate of 7 percent per annum was accrued as a non-current asset at December 31,
2001.

In June 1998, Metaline executed an agreement with Nor-Pac Limited Company
wherein, for providing management and consulting services to Metaline, Nor-Pac
was entitled to receive 500,000 shares of Metaline common stock in the second
half of 1998, 250,000 shares of Metaline common stock quarterly in 1999 and
$10,000 per month thereafter commencing on January 1, 2000. This agreement
was subsequently modified with an effective date of January 1, 2002, as
described in Note 11.

For additional information on related parties, see Notes 3, 6 and 10.

NOTE 6  MINING LEASE WITH PURCHASE OPTION

On September 1, 1997, Metaline and The LLC acting jointly as lessors, executed
an agreement with Cominco American Incorporated (hereinafter Cominco) wherein
Cominco received the right to explore, develop, and mine Metalines underground
mineral rights in Pend Oreille County, Washington for a period of twenty years
with an option renewal period of the same length. Under this lease agreement,
Cominco obligated itself to pay the lessors $3,000 per quarter for the first
five years of the lease with ascending quarterly increments at each successive
five year interval.

The aforementioned quarterly disbursements are characterized by the lease as
advance royalty payments which may be fully offset against a three-percent
production royalty retained by the lessors.The lease agreement, while providing
that Cominco must expend $125,000 in exploration work within the first five
years of the lease, also gave Cominco the option to purchase 200 surface acres
of the leased property for fair market value during the lease term. From the
inception of the lease through December 31, 2001, Metaline has received $51,016
in payments from Cominco.

During 2001, Teck Cominco Limited was formed
following the acquisition of
Cominco Corporation by another mining company, Teck Corporation. The former
subsidiary of Cominco Corporation, Cominco American Incorporated was renamed,
Teck Cominco American, Inc., and continues as lessee under the original
agreement discussed in the preceding paragraph.

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##### Table of Contents



METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 7  CHANGE IN LLC OWNERSHIP

On June 1, 1998, Nor-Pac Limited Company purchased control of Metaline from its
three principal owners at the time (Bunker Limited Partnership, Hecla Mining
Company, and Metaline Mining & Leasing Company) by acquiring these entities
interests in Metaline Contact Mines LLC. See Note 1 and Note 5.

NOTE 8  INCOME TAXES

Income taxes are provided based upon the liability method of accounting
pursuant to SFAS No. 109 Accounting for Income Taxes. Under this approach,
deferred income taxes are recorded to reflect the tax consequences on future
years of differences between the tax basis of assets and liabilities and their
financial reporting amounts at each year-end. A valuation allowance is
recorded against deferred tax assets if management does not believe the Company
has met the more likely than not standard imposed by SFAS No. 109 to allow
recognition of such an asset.

At December 31, 2001, the Company had net deferred tax assets of approximately
$138,000, principally arising from net operating loss carryforwards for income
tax purposes. As management of the Company cannot determine that it is more
likely than not that the Company will realize the benefit of the net deferred
tax asset, a valuation allowance equal to the net deferred tax asset has been
established at December 31, 2001.

At December 31, 2001, the Company has a net operating loss carryforward of
approximately $690,000 which will expire in the year 2021.

NOTE 9  STOCK OPTIONS

On November 16, 1999, the board of directors approved the Metaline Contact
Mines 1999 Stock Option Plan. This plan allows the Company to distribute up to
2,000,000 shares of common stock shares to officers, directors, employees and
consultants through the authorization of the Companys board of directors at an
initial exercise price of $0.125, or $0.15, depending on the terms of the
option certificate. The options may be exercised until November 16, 2009, at
which time they expire.

The fair value of the options granted on November 12, 2001 was estimated using
the Black-Scholes Option Price Calculation. The following assumptions were
made to estimate fair value: the risk-free interest rate is 6.0%, volatility
is 0.24, and the expected life of the options is eight years. Accordingly,
$4,275 of option expense was recorded in the Companys financial statements as
consulting and management fees. In accordance with Financial Accounting
Standard No. 123 paragraph 115, this expense was deemed to be an estimate,
subject to adjustment by decreasing the expense in the period of forfeiture.

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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 9  STOCK OPTIONS (continued)

Following is a summary of the status of fixed options outstanding at December
31, 2001 and December 31, 2000:

|                               |                            |  |           |         |          |   |          |       | 
|------------------------------ | -------------------------- |  | --------- | ------- | -------- | - | -------- | ----- | 
|                               |                            |  |           |         |          |   | Weighted
|                               |                            |  |           |         |          |   | Average 
|                               |                            |  | Number of |         | Exercise
|                               |                            |  | Shares    |         | Price   
|                               |                            |  |           |         |         
|Outstanding, January 1, 2000   |                            |  | 1,000,000 |         |          | $ | 0.125    |      
|                               | Granted                    |  |           |        |          |   |          |      | 
|                               | Exercised                  |  |           |        |          |   |          |      | 
|                               | Forfeited                  |  |           |        |          |   |          |      | 
|                               | Expired                    |  |           |        |          |   |          |      | 
|                               |                            |  |           |         |          |   |          |      
|Outstanding, December 31, 2000 |                            |  | 1,000,000 |         |          | $ | 0.125    |      
|                               |                            |  |           |         |          |   |          |      
|Exercisable, December 31, 2000 |                            |  | 1,000,000 |         |          | $ | 0.125    |      
|                               |                            |  |           |         |          |   |          |      
|Outstanding January 1, 2001    |                            |  | 1,000,000 |         |          | $ | 0.125    |      
|                               | Granted, November 12, 2001 |  |           | 250,000 |          |   |          | 0.150 | 
|                               | Exercised                  |  |           |        |          |   |          |      | 
|                               | Forfeited                  |  |           |        |          |   |          |      | 
|                               | Expired                    |  |           |        |          |   |          |      | 
|                               |                            |  |           |         |          |   |          |      
|Outstanding, December 31, 2001 |                            |  | 1,250,000 |         |          | $ | 0.130    |      
|                               |                            |  |           |         |          |   |          |      
|Exercisable, December 31, 2001 |                            |  | 1,250,000 |         |          | $ | 0.130    |      
|                               |                            |  |           |         |          |   |          |      

Weighted average fair value of options granted during 2001: $0.02

NOTE 10  COMMITMENTS AND CONTINGENCIES

All earnings from The LLC in 1997 and 1996 were attributed by The LLCs
principal owners to Metaline. Accordingly, Metaline reported these earnings as
its own taxable income (on both Metalines and The LLCs federal income tax
returns) with Metaline retaining only a 6.9861 percent interest in The LLC.
For calendar years 1998 through 2001, Metaline reported only its pro rata share
(6.9861%) of taxable income from The LLC, with other LLC members reporting
their respective share of LLC taxable income.

F-13



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2001

NOTE 10  COMMITMENTS AND CONTINGENCIES (continued)

The LLC has agreed, in writing, to indemnify Metaline for any prior year income
distributions requested by other LLC members. As of December 31, 2001, no cash
or property distributions were made by the LLC to its members for
indemnification purposes. In view of the ownership changes in The LLC, future
distributions are expected to be made by The LLC to its members as determined
from time to time by Metaline, its managing member. See Note 7 regarding a
change in LLC ownership and see Note 5 regarding related party commitment.

NOTE 11  SUBSEQUENT EVENTS

Effective January 1, 2002, the agreement between Nor-Pac Limited Company
(Nor-Pac) and Metaline Contact Mines was amended to provide that Nor-Pac will
receive $3,000 per month, rather than $10,000 per month for management and
consulting services.

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Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

There have been no changes in or disagreements with accountants on
accounting and financial disclosure of the Company during the Companys two
most recent fiscal years.




PART III




Item 9. Directors, Executive Officers, and Promoters and Control Persons

The officers and directors of the Company are as follows:

Richard L. Howell. Age 67. Mr. Howell has been the President and a
director of the Company since 1998. From 1978 to 1995, Mr. Howell was
the Personal Representative of the Estate of Nelson R. Howard and Trustee
of the Testamentary Trust created under the Will of Nelson R. Howard.
From 1995 to June 1, 2000, Mr. Howell was the Manager of Golconda Limited
Company, the successor to the Nelson Howard Trust. From 1994 to present
Mr. Howell has been the President and a Governor of Mission Mountain
Interests Ltd. Co.; from 1997 to present the President and a Governor of
Nor-Pac Limited Company; from 1998 to present, the President and a
Governor of Murrayville Land Company LLC, and from 1998 to present, a
Director of Paymaster Resources Incorporated.

John W. Beasley. Age 56. Mr. Beasley has been the Secretary and a
director of the Company since 1998. He holds a Bachelor of Science
degree in Agricultural Economics from the University of California at
Berkeley. From 1967 to 1975, Mr. Beasley played professional football
for the Minnesota Vikings (including Super Bowl IV) and New Orleans
Saints. From 1976 to 1982, he held numerous management positions with
the Gulf Consolidated Services organization, including Vice President -
Eastern Hemisphere in London, England. From 1992 to present, Mr. Beasley
has been President and Manager of J.W. Beasley Interests LLC; from 1994
to present, the Secretary and a Governor of Mission Mountain Interests
Ltd. Co.; from 1997 to present, the Secretary and a Governor of Nor-Pac
Limited Company; from 1998 to present, the Secretary and a Governor of
Murrayville Land Company LLC, the Secretary and a Governor of
East-of-Idaho LLC, and the President and a Director of Paymaster
Resources Incorporated; from 1999 to present, the Secretary and a
Governor of Prichard Creek Resource Partners LLC.

Ed Pommerening. Age 54. Mr. Pommerening has been a director of the
Company since 1998. He holds a Bachelor of Science degree in Forestry
from the University of Idaho. From 1974 to 1982, Mr. Pommerening was the
Forester for The Bunker Hill Company, and from 1982 to 1991 for the
Bunker Limited Partnership. From 1991 through 1993, Mr. Pommerening was
the Forester for Pintlar Corp. From 1993 to the present, Mr. Pommerening
has been the President and Manager of Riverview Timber Services LLC; from
1997 to present, a Governor of Nor-Pac Limited Company, and from 1998 to
present, the Secretary and a Director of Paymaster Resources
Incorporated.

The principal business conducted by the other companies mentioned in the
above resumes is as follows:



|(1) |  | Golconda Limited Company, an Idaho limited liability company,
is the successor to the assets formerly owned in the Nelson Howard
Trust, which actively invests in real estate, private timberlands,
ranchlands, and other companies.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(2)  |  | Mission Mountain Interests Ltd. Co., an Idaho limited
liability company, owns and operates private timberlands, which
timberlands are leased to the City of Kellogg, as the Silver
Mountain Ski and Summer Resort, in Shoshone County, Idaho.      
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(3)  |  | J.W. Beasley Interests LLC, an Idaho limited liability
company, is a management, consulting and investment holding company
specializing in the natural resources industry.                                                                         
|    
|(4)  |  | Riverview Timber Services LLC, an Idaho limited liability
company, is a consulting forestry company.                                                                                                                                               
|    
|(5)  |  | Paymaster Resources Incorporated, an Idaho corporation, is a
mineral exploration company that leases the Golden Chest Mine,
Shoshone County, Idaho.                                                                                                
|    
|(6)  |  | Nor-Pac Limited Company, an Idaho limited liability company,
is a management, consulting and investment holding company with
interests in real property and other companies.                                                                       
|    
|(7)  |  | Murrayville Land Company LLC, an Idaho limited liability
company, owns and operates an executive office facility in Murray,
Idaho.                                                                                                                 
|    
|(8)  |  | East-of-Idaho LLC, a Wisconsin limited liability company,
owns and operates a small resort in central Wisconsin.                                                                                                                                   
|    
|(9)  |  | Prichard Creek Resource Partners LLC, an Idaho limited
liability company, owns unpatented mining claims in Shoshone County,
Idaho.                                                                                                                 
|    
|(10) |  | Pintlar Corp. was a wholly owned subsidiary of Gulf Resources
& Chemical created to manage the environmental affairs at the Bunker
Hill Mine Superfund Site in Kellogg, Idaho, and the employee
retirement/benefit plans for Bunker Hill employees.

The Directors of the Company are not directors of any other reporting
companies. The Companys Secretary, John W. Beasley, spends approximately
20 hours per week, and its President, Richard L. Howell, spends
approximately 5 hours per week, on the business affairs of the Company.

There are no persons, other than the officers and directors of the
Company, expected to make a significant contribution to the business of the
Company. There are no family relationships among the officers and directors of
the Company, nor have any of them been subject to a bankruptcy petition filed
by or against any business of which they were officers, directors or partners.
Additionally, none of the officers and directors of the Company have been
convicted in a criminal proceeding, or subject to a pending criminal
proceeding; been, or is subject to any order, judgment, or decree of any court
of competent jurisdiction permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities. None of the officers and directors of the
Company have violated any federal or state securities or commodities law, or
found by any court of competent jurisdiction, the Securities and Exchange
Commission, or the Commodity Futures Trading Commission to have violated any
such laws.

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Item 10. Executive Compensation

On June 1, 1998, the Company entered into the Management Agreement
described below with Nor-Pac Limited Company (Nor-Pac). To date, the
Company has paid Nor-Pac management fees in the amount of 1,500,000
shares of its authorized, but unissued, common stock, with an aggregate
value of $75,000, and $140,000 in cash. Nor-Pac is owned, as to 75%, by
entities that are owned by the Companys directors as disclosed below.

Summary Compensation Table

SUMMARY COMPENSATION TABLE

|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |              |   |         |  |                        |   |            |  |           |         |  |  |  |   |  |  |  |        | 
|--------------- |  | ---- | ---- | --- |  | ------------------- | - | ------ |  | ------------ | - | ------ |  | ------------ | - | ------- |  | ---------------------- | - | ---------- |  | --------- | ------- |  |  |  | - |  |  |  | ------ | 
|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |              |   |         |  | Long Term Compensation |   |            |  |           |         |  |  | 
|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |              |   |         |  |                        |   |            |  |           |         |  |  | 
|                |  |      |      |     |  | Annual Compensation |   | Awards |  | Payouts      |   |        |  |             
|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |             
|(a)             |  | (b)  |      | (c) |  | (d)                 |   | (e)    |  | (f)          |   | (g)    |  | (h)          |   | (i)    
|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |              |   |        
|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |              |   |         |  | Restricted             |   | Securities |  |           |         |  |  |  |   | 
|Name and        |  |      |      |     |  |                     |   |        |  |              |   |        |  | Other Annual |   | Stock   |  | Underlying             |   | LTIP       |  | All Other
|Principal       |  |      |      |     |  | Salary              |   | Bonus  |  | Compensation |   | Awards |  | Option/SAR   |   | Payouts |  | Compensation          
|Position        |  | Year |      | ($) |  | ($)                 |   | ($)    |  | ($)          |   | (#)    |  | ($)          |   | ($)    
|                |  |      |      |     |  |                     |   |        |  |              |   |        |  |              |   |        
|Richard Howell, |  |      | 1999 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 250,000 |  |  |  | 0 |  |  |  | 1,050  | 
|President and   |  |      | 2000 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 0       |  |  |  | 0 |  |  |  | 12,500 | 
|Director        |  |      | 2001 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 0       |  |  |  | 0 |  |  |  | 0      | 
|               
|John Beasley,   |  |      | 1999 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 250,000 |  |  |  | 0 |  |  |  | 1,050  | 
|Secretary and   |  |      | 2000 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 0       |  |  |  | 0 |  |  |  | 12,500 | 
|Director        |  |      | 2001 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 0       |  |  |  | 0 |  |  |  | 0      | 
|               
|Ed Pommerening  |  |      | 1999 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 250,000 |  |  |  | 0 |  |  |  | 1,050  | 
|Director        |  |      | 2000 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 0       |  |  |  | 0 |  |  |  | 12,500 | 
|                |  |      | 2001 |     |  |                     | 0 |        |  |              | 0 |        |  |              | 0 |         |  |                        | 0 |            |  |           | 0       |  |  |  | 0 |  |  |  | 0      | 

Option/SAR Grants Table

Option/SAR Grants in Last Fiscal Year

|                     |  |         |                          |                |                          |       |             |      |            |   |      |  |  |  |          |  | 
|-------------------- |  | ------- | ------------------------ | -------------- | ------------------------ | ----- | ----------- | ---- | ---------- | - | ---- |  |  |  | -------- |  | 
|                     |  |         | Individual Grants       
|                     |  |         |                         
|(a)                  |  | (b)     |                          | (c)            |                          | (d)   |             | (e) 
|                     |  |         |                          |                |                          |       |             |     
|                     |  |         | Number of Securities     |                | % of Total Options/SAR's |       | Exercise or |      |            |   |     
|                     |  |         | Underlying Options/SAR's |                | Granted to Employees     |       | Base Price  |      | Expiration
|Name                 |  | Granted |                          | in Fiscal Year |                          | ($/S) |             | Date
|                     |  |         |                          |                |                          |       |             |     
|Nelson Robert Howard |  |         | 250,000                  |                |                          |       | 100         | %    |            | $ | 0.15 |  |  |  | 11-22-09 | 

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| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Note: | The Exercise Price, as specified in column d
above is subject to adjustment. In the event the Company
issues or sells any common stock for a per share
consideration of less than the Exercise Price stated in
column d above, the Exercise Price shall be reduced to the
price (calculated to the nearest cent) determined by
multiplying the Exercise Price in effect immediately prior to
the time of such issue or sale by a fraction (i) the
numerator of which shall be the sum of (x) the aggregate
number of common shares outstanding immediately prior to such
issue or sale plus (y) the consideration received by the
Company upon such issue or sale, and (ii) the denominator of
which shall be the product of (x) the aggregate number of
common shares outstanding immediately after the issue or
sale, multiplied by (y) the market price of the common shares
immediately prior to such issue or sale.
No adjustment of the Exercise Price shall be made by reason
of (i) the issue, sale, or grant under any stock option plan
or stock purchase plan of the Company or under any
individual arrangement or otherwise, to any employee or
director of the Company or any independent contractor, in
consideration of the rendering of services to the Company by
such employee, director, or independent contractor, of any
common shares or rights to subscribe for or to purchase, or
options for the purchase of, common shares or convertible
securities or (ii) a change in the purchase price provided
for in any such right or option, in the additional
consideration, if any, payable upon the conversion or
exchange of any such convertible securities, or in the rate
at which any such convertible securities are convertible or
exchangeable.

Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table

Aggregate Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

|               |  |              |   |          |  |                           |   |  |  |                                 |           |                           |  |  |  |                           |  |  |       | 
|-------------- |  | ------------ | - | -------- |  | ------------------------- | - |  |  | ------------------------------- | --------- | ------------------------- |  |  |  | ------------------------- |  |  | ----- | 
|(a)            |  | (b)          |   | (c)      |  | (d)                       |   |  |  |                                 |           | (e)                       |  |  |  |                          
|               |  |              |   |          |  |                           |   |  |  |                                 |           |                          
|               |  |              |   |          |  |                           |   |  |  | Number of Securities Underlying |           |                           |  |  |  | Value of Unexercised     
|               |  |              |   |          |  |                           |   |  |  | Unexercised Options/SARs        |           |                           |  |  |  | In-the-Money Options/SARs
|               |  | Shares       |   | Value    |  | at FY-End (#)             |   |  |  |                                 |           | at FY-End ($)            
|               |  | Acquired on  |   | Realized |  |                           |   | 
|Name           |  | Exercise (#) |   | ($)      |  | Exercisable/Unexercisable |   |  |  |                                 |           | Exercisable/Unexercisable
|               |  |              |   |          |  |                           |   | 
|Richard Howell |  |              | 0 |          |  |                           | 0 |  |  |                                 | 250,000/0 |                           |  |  |  |                           |  |  | $0/$0 | 
|John Beasley   |  |              | 0 |          |  |                           | 0 |  |  |                                 | 250,000/0 |                           |  |  |  |                           |  |  | $0/$0 | 
|Ed Pommerening |  |              | 0 |          |  |                           | 0 |  |  |                                 | 250,000/0 |                           |  |  |  |                           |  |  | $0/$0 | 
|Gene George    |  |              | 0 |          |  |                           | 0 |  |  |                                 | 250,000/0 |                           |  |  |  |                           |  |  | $0/$0 | 
|Nelson Robert  |  |              | 0 |          |  |                           | 0 |  |  |                                 | 250,000/0 |                           |  |  |  |                           |  |  | $0/$0 | 
|Howard         |  |              |   |          |  |                           |   |  |  |                                 |           |                           |  |  |  |                           |  |  |       | 

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The Company has no Long Term Incentive Plans. Directors of the Company
receive $175.00 for each regularly scheduled meeting of directors, and
$350.00 for each specially scheduled meeting, plus normal out-of-pocket
expenses incurred to attend said meetings. Except for the options
granted to the Directors as described below, there are no other
arrangements to compensate directors. The Company has no employment
contracts with its executive officers, and no compensatory plan or
arrangements with its executive officers in the event of the resignation,
retirement or any other termination of such executive officers, nor does
the Company have any arrangements with its executive officers in the
event of a charge in control of the Company.

There was an increase of $0.025 per share if the exercise price of stock
options granted in November of 2001 versus the options granted in
November of 1999.




Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table describes the Security Ownership of Certain
Beneficial Owners and Management as of April 1, 2002:

|               |  |                                                             |  |                           |  |                  |        |               |  |                          |            |  |  |  |        |   
|-------------- |  | ----------------------------------------------------------- |  | ------------------------- |  | ---------------- | ------ | ------------- |  | ------------------------ | ---------- |  |  |  | ------ | --
|(1)            |  | (2)                                                         |  | (3)                       |  | (4)              |        | (5)          
|               |  |                                                             |  |                           |  |                  |        |              
|               |  | Name and                                                    |  | Amount and                |  |                  |        |               |  |                         
|               |  | Address of                                                  |  | Nature of                 |  |                  |        |               |  | Amount and (Percent)    
|               |  | Beneficial                                                  |  | Beneficial                |  |                  |        |               |  | of
Class if All Warrants
|Title of Class |  | Owner                                                       |  | Owner                     |  | Percent of Class |        | are
Exercised
|               |  |                                                             |  |                           |  |                 
|Common         |  | Metaline Contact
Mines LLC
P.O. Box 387
Murray, ID 83874(1) |  | 11,236,643
Direct Owner   |  |                  | 79.89% |               |  |                          | 11,236,643 |  |  |  | (73.30 | %)
|              
|Common         |  | Nor-Pac Limited
Company
P.O. Box 412
Murray, ID 83874       |  | 1,500,000
Direct Owner    |  |                  | 10.66% |               |  |                          | 1,500,000  |  |  |  | (9.70  | %)
|              
|Common         |  | Richard L. Howell
1509 Hemlock
Lewiston, ID 83501           |  | 3,183,992
Indirect Owner  |  |                  | 22.60% |               |  |                          | 3,433,992  |  |  |  | (22.40 | %)
|              
|Common         |  | Ed Pommerening
P.O. Box 369
Pinehurst, ID 83850             |  | 3,183,992
Indirect Owner  |  |                  | 22.60% |               |  |                          | 3,433,992  |  |  |  | (22.40 | %)
|              
|Common         |  | John W. Beasley
P.O. Box 387
Murray, ID 83874               |  | 1,591,996
Indirect Owner  |  |                  | 11.30% |               |  |                          | 1,841,996  |  |  |  | (12.00 | %)
|              
|Common         |  | Directors and
Executive Officers
as a group                 |  | 7,959,980
Indirect Owners |  |                  | 56.50% |               |  |                          | 8,709,980  |  |  |  | (56.80 | %)



---

|Note 1: |  | Metaline Contact Mines LLC is owned, as to 99.994%, by
Nor-Pac Limited Company (hereinafter Nor-Pac).
|------- |  | -------------------------------------------------------------------------------------------------------

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|Note 2: |  | Richard L. Howell is the Trustee of the R.L. and M.D.
Howell Trust, the owner of a 25% equity membership interest in
Nor-Pac; Ed Pommerening is the President and Manager of Riverview
Timber Services LLC, the owner of a 25% equity membership interest
in Nor-Pac; and John W. Beasley is the President and Manager of J.W.
Beasley Interests LLC, a limited partner (as to 50%) of G.G.J.B. &
K.G.P.B. Holdings Limited Partnership (hereinafter referred to as
GGJB). GGJB is the owner of a 25% equity membership interest in
Nor-Pac.
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|        |  | By virtue of their respective interests in R.L. and M.D. Howell
Trust, Riverview Timber Services LLC, and J.W. Beasley Interests
LLC (and its interests in GGJB), and those entities respective
interests in Nor-Pac, Messrs. Howell, Pommerening, and Beasley are
considered as being indirect owners of the above shares.                                                                                                                                                                                                                
|       
|       
|       
|       
|        |  | There are no arrangements, written or oral, which may result in a
change in control of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                           




Item 12. Certain Relationships and Related Transactions

On June 1, 1998, the Company entered into an Agreement for Management and
Consulting Services with Nor-Pac Limited Company (hereinafter referred to
as the Management Agreement), which Management Agreement was amended by
First Amendment to the Agreement for Management and Consulting Services,
dated January 1, 1999. Under the terms of the Management Agreement
Nor-Pac Limited Company (hereinafter referred to as Nor-Pac) provides
the Company with certain management and consulting services, and Nor-Pac
is entitled to receive Five Hundred Thousand (500,000) shares of the
Companys authorized, but unissued, common stock in the second half of
1998, Two Hundred Fifty Thousand (250,000) shares quarterly in 1999, and
Ten Thousand Dollars ($10,000.00) per month thereafter commencing on
January 1, 2000. In the event in 1999 the Companys common stock becomes
publicly traded on NASDAQs Over-the-Counter Electronic Bulletin Board
(OTCBB), Nor-Pac shall receive as additional compensation Five Hundred
Thousand (500,000) shares of common stock and One Million
(1,000,000) shares if the Companys common stock become listed on NASDAQ. In 1999,
the Companys common stock did not become publicly traded on either the
OTCBB or NASDAQ, and as a result, Nor-Pac was not compensated the
additional shares of the Companys common stock as described hereinabove.

Commencing on January 1, 2000, the Company and Nor-Pac review on a
quarterly basis the amount and scope of the consulting, management and
advisory services performed by Nor-Pac on the Companys behalf, and if it
is determined that it is a materially greater of lesser amount, then the
Company and Nor-Pac shall agree to an equitable adjustment in the fees
paid by the Company. All payments due Nor-Pac pursuant to the terms of
the Management Agreement have been made.

Under the terms of the Management Agreement, Nor-Pac makes available to
the Company the services of its officers and representatives for the
purposes of advising and consulting with the Company concerning all
phases of the Companys business affairs and operations, including the
following:



|(1) |  | assisting the Company in determining its short and long term
capital requirements, in determining the best method of fulfilling
such capital requirements, and in locating sources of equity and
long and short term debt financing;
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | assisting the Company in determining the need for and
devising and installing financial, accounting and other office and
business systems and controls;                                                                             

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|(3) |  | assisting the Company in developing business investment and
management plans and programs, in formulating policies and
objectives, and carrying out such plans, programs and policies
required for the efficient and successful operation of the Companys
business operations;
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(4) |  | assisting the Company in developing a public trading market for its
securities;                                                                                                                                                                                                
|   
|(5) |  | assisting the Company in finding, researching, evaluating,
leasing, acquiring, joint venturing and in any and all ways securing
the rights to natural resource properties.                                                                                                     

Nor-Pac is Seventy Five Percent (75%) owned by entities that are owned,
directly or indirectly, in whole or in part, by Richard L. Howell, John
W. Beasley and Ed Pommerening, directors of the Company. Because of
their respective interests in these entities, Richard L. Howell, John W.
Beasley and Ed Pommerening may be deemed to have an indirect material
interest in the transaction.

Subsequent Event to Management Agreement

On January 1, 2002, the Company and Nor-Pac amended the Management
Agreement thereby reducing the management fee from Ten Thousand Dollars
($10,000.00) to Three Thousand Dollars ($3,000.00) per month.

It is the opinion of the management of the Company that the services and
fees provided for in the Management Agreement as amended are no less
favorable to the Company than could have been secured in arms-length
transactions.

Metaline Contact Mines LLC (MCMLLC), a Delaware limited liability
company, owns 79.89% of the outstanding shares of the Company. The
Company is the Managing Member of MCMLLC.

The Company has not transacted any business with promoters, nor have any
of its assets been or are to be acquired from promoters.




Item 13. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits required by Item 601 of Regulation S-B:
|--- |  | ------------------------------------------------

| |             |  |                                                                                                                                                     
| | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit No. |  | Description                                                                                                                                         
| |             |  |                                                                                                                                                     
| | 3(i)        |  | Amended Articles of Incorporation. Incorporated
by reference to the Companys Registration Statement on Form
10-SB. File No. 0-31025.               
|
| | 3(ii)       |  | By-Laws. Incorporated by reference to the
Companys Registration Statement on Form 10-SB. File No.
0-31025.                                         
|
| | 10(i)       |  | Mining Lease With Purchase Option.
Incorporated by reference to the Companys Registration
Statement on Form 10-SB. File No. 0-31025.               
|
| | 10(ii)(A)   |  | Agreement for Management and Consulting Services.
Incorporated by reference to the Companys Registration
Statement on Form 10-SB. File No. 0-31025.

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| | (b) |  | No reports have been filed on Form 8-K during the last fiscal
year covered by this report.
| | --- |  | ------------------------------------------------------------------------------------------




SIGNATURE

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

METALINE CONTACT MINES

|    |  |                                                            |  |       |  |        
|--- |  | ---------------------------------------------------------- |  | ----- |  | -------
|By: |  | /s/ Richard L. Howell                                      |  | Date: |  | 3/25/02
|    |  |                                                            |  |       |  |        
|    |  | Richard L. Howell, President
(Principal Executive Officer) |  |       |  |        
|   
|By: |  | /s/ John W. Beasley                                        |  | Date: |  | 3/25/02
|    |  |                                                            |  |       |  |        
|    |  | John W. Beasley, Secretary
(Principal Financial Officer)   |  |       |  |        

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

|    |  |                            |  |       |  |        
|--- |  | -------------------------- |  | ----- |  | -------
|By: |  | /s/ Richard L. Howell      |  | Date: |  | 3/25/02
|    |  |                            |  |       |  |        
|    |  | Richard L. Howell
Director |  |       |  |        
|   
|By: |  | /s/ John W. Beasley        |  | Date: |  | 3/25/02
|    |  |                            |  |       |  |        
|    |  | John W. Beasley
Director   |  |       |  |        
|   
|By: |  | /s/ Ed Pommerening         |  | Date: |  | 3/25/02
|    |  |                            |  |       |  |        
|    |  | Ed Pommerening
Director    |  |       |  |        

Supplemental information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Exchange Act by Non-Reporting Issuers

Not Applicable

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